Bullard, who has been the
The Fed uses two main tools, short-term policy interest rates and quantitative easing in which the central bank buys government securities and mortgage-backed securities.
In the financial crisis, the bank lowered the short-term interest rate to zero and began making security purchases.
The objective now is to create a policy normalization path without creating economic inflation or significant problems, the speaker said.
Getting back to normal, though, takes years, and the policy goals are far from being met, he said.
The Fed is continuing to buy bonds, but it has reduced the amount it holds.
The central bank has not started to "normalize" for a number of reasons, including the low inflation rate over the past year; unexpectedly slow real GDP rate during the recovery; and labor markets that don't seem to be fully recovered even though unemployment has come down.
Bullard said payroll employment and unemployment rates are pretty good, but other labor market statistics are not so good.
Unemployment rates are close to normal and projected to continue to decline "so long as the economy continues to remain relatively robust," Bullard said.
"Where the policy debate is centered now is 'when will the job market be back to normal?' " he said.
Bullard said after his speech that his opinion continues to be that the Fed is most likely to raise interest rates at the end of the first quarter of next year. The key is whether the economy can produce 3 percent growth in the second quarter.
Bryant said the Fed is responsive to anecdotal conversations the branch board provides about what's going on with "people on the street."
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